Celanese Corporation Reports Full Year 2019 and Fourth Quarter Earnings; Reaffirms 2020 Outlook

Celanese Corporation (NYSE: CE), a global chemical and specialty materials company, today reported GAAP diluted earnings per share of $6.89 and adjusted earnings per share of $9.53 for 2019. Net sales for the full year were $6.3 billion, as price and volume declined by 7 percent and 3 percent, respectively, from 2018. Despite weak demand and broad industry destocking across 2019, all businesses executed controllable actions centered on capturing new business opportunities, executing productivity initiatives, and deploying high-return capital to deliver solid performance. The Company generated robust operating cash flow of $1.5 billion and free cash flow of $1.1 billion. Celanese returned a record $1.3 billion in cash to shareholders during 2019, including $300 million in dividends and $1.0 billion in share repurchases. During the year, the Company repurchased 7 percent of total shares outstanding. Based primarily on further controllable actions including productivity initiatives and capital deployment, the Company expects to reach 2020 adjusted earnings of approximately $11 per share despite no assumed meaningful improvement from 2019 market conditions.

Celanese also recorded fourth quarter GAAP diluted earnings per share of $0.35 and adjusted earnings per share of $1.99. The difference between GAAP and adjusted earnings per share for the quarter was due primarily to Certain Items including a pension mark to market adjustment, a reserve related to the European Commission investigation, and the incident at Clear Lake.

"Against significant challenges throughout 2019, underpinned by disappointing global demand, our teams demonstrated great resiliency in delivering the second strongest performance in Celanese history. In this environment, our heightened focus on the factors within our control, including a robust productivity program and high-return capital deployment, has allowed us to weather these challenges and remain positioned to deliver on our long-term growth ambitions in 2020 and beyond," said Lori Ryerkerk, chief executive officer.

Fourth Quarter 2019 and Full Year 2019 Financial Highlights:
	Three Months Ended
	December 31, 2019			September 30, 2019			December 31, 2018
	(unaudited)
	(In $ millions, except per share data)
Net Sales
Engineered Materials	539			591			622
Acetate Tow	148			158			161
Acetyl Chain	771			867			936
Intersegment Eliminations	(26	)		(30	)		(30	)
Total	1,432			1,586			1,689

	Year Ended December 31,
	2019			2018
	(unaudited)
	(In $ millions, except per share data)
Net Sales
Engineered Materials	2,386			2,593
Acetate Tow	636			649
Acetyl Chain	3,392			4,042
Intersegment Eliminations	(117	)		(129	)
Total	6,297			7,155

	Three Months Ended
	December 31, 2019			September 30, 2019			December 31, 2018
	(unaudited)
	(In $ millions, except per share data)
Operating Profit (Loss)
Engineered Materials	88			111			95
Acetate Tow	22			34			19
Acetyl Chain	108			180			211
Other Activities	(150	)		(65	)		(66	)
Total	68			260			259

	Year Ended December 31,
	2019			2018
	(unaudited)
	(In $ millions, except per share data)
Operating Profit (Loss)
Engineered Materials	446			460
Acetate Tow	52			130
Acetyl Chain	678			1,024
Other Activities	(342	)		(280	)
Total	834			1,334

	Three Months Ended
	December 31, 2019				September 30, 2019				December 31, 2018
	(unaudited)
	(In $ millions, except per share data)
Net Earnings (Loss)	45				265				101
Adjusted EBIT(1)
Engineered Materials	136				154				150
Acetate Tow	54				71				53
Acetyl Chain	144				191				215
Other Activities	(31		)		(40		)		(25		)
Total	303				376				393
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials	45				41				49
Acetate Tow	24				27				25
Operating EBITDA(1)	387				458				471
Diluted EPS - continuing operations	$	0.35			$	2.17			$	0.73
Diluted EPS - total	$	0.36			$	2.13			$	0.75
Adjusted EPS(1)	$	1.99			$	2.53			$	2.38
Net cash provided by (used in) investing activities	(168		)		(82		)		(98		)
Net cash provided by (used in) financing activities	(199		)		(299		)		(526		)
Net cash provided by (used in) operating activities	326				397				363
Free cash flow(1)	179				315				261

______________________________
(1)		See "Non-US GAAP Financial Measures" below.

	Year Ended December 31,
	2019				2018
	(unaudited)
	(In $ millions, except per share data)
Net Earnings (Loss)	858				1,213
Adjusted EBIT(1)
Engineered Materials	621				694
Acetate Tow	268				273
Acetyl Chain	727				1,022
Other Activities	(140		)		(137		)
Total	1,476				1,852
Equity Earnings and Dividend Income, Other Income (Expense)
Engineered Materials	168				219
Acetate Tow	112				116
Operating EBITDA(1)	1,805				2,168
Diluted EPS - continuing operations	$	6.89			$	8.95
Diluted EPS - total	$	6.84			$	8.91
Adjusted EPS(1)	$	9.53			$	11.00
Net cash provided by (used in) investing activities	(493		)		(507		)
Net cash provided by (used in) financing activities	(935		)		(1,165		)
Net cash provided by (used in) operating activities	1,454				1,558
Free cash flow(1)	1,074				1,198

______________________________
(1)		See "Non-US GAAP Financial Measures" below.

Full Year Business Segment Overview

Engineered Materials

Engineered Materials generated net sales of $2.4 billion, down 8 percent over 2018 due to a 5 percent decline in volume and a 3 percent currency headwind. Continued success in execution of the project pipeline model to deliver over 4,000 wins in the year and targeted commercial actions offset the majority of volume and price headwinds in 2019, which resulted from broad demand softness, industry destocking, and a seasonally weaker than anticipated fourth quarter. The business delivered GAAP operating profit of $446 million and adjusted EBIT of $621 million. While GAAP operating profit of the business fell 3 percent year over year, adjusted EBIT fell 11 percent, primarily due to lower than expected affiliate earnings which declined 23 percent over the same period. Execution in the base business of engineered materials, excluding affiliates, offset most of the demand headwinds while expanding full year adjusted EBIT margins to 19 percent in the base business, 70 basis points higher than 2018.

Acetyl Chain

The Acetyl Chain delivered 2019 net sales of $3.4 billion, a decline of 16 percent over last year. Volume in 2019 was down 1 percent over the prior year as the business offset most of the impact of the outage at Clear Lake by flexing its global production network and sourcing capabilities. Price declined 13 percent off 2018 levels as global industry utilization fell due to demand softness and limited outage and curtailment activity, particularly in acetic acid. Despite significant pricing headwinds, the Acetyl Chain continued to generate elevated foundational earnings with GAAP operating profit of $678 million and adjusted EBIT of $727 million, at margins of 20 percent or higher. Throughout 2019, the Acetyl Chain pivoted downstream from acetic acid into VAM and emulsions, delivering 8 percent more tonnage down the acetyl value chain. Additionally, the business dynamically optimized the regional sales mix in 2019 to reduce sales exposure to Asia and increase volume sold in the Western Hemisphere where pricing fell less sharply. By exercising the full breadth of flexibility across its global network and integrated product chain, the business has delivered multiple years of sustained profitability by capturing the highest value commercial opportunities.

Acetate Tow

Acetate Tow recorded GAAP operating profit of $52 million and adjusted EBIT of $268 million for 2019. Full year net sales of $636 million reflected pricing that was flat year over year and volume that fell 2 percent due to continued gradual decline in secular demand. Despite declining demand, the business continues to display a stabilized earnings profile due to contributions from productivity initiatives. Dividends from affiliates were $112 million in 2019, consistent with the prior year.

Recent Highlights

• Signed an agreement to acquire Elotex, a leading manufacturer of redispersible polymer powders, further extending the Acetyl Chain integrated product chain and expanding derivatization optionality within its global network.
• Commissioned two new Engineered Materials compounding lines in Suzhou and Nanjing, China to support new business in the fastest growing region of the world.
• Initiated preparations to consolidate Engineered Materials compounding operations at the Shelby, North Carolina site to other existing facilities by the middle of 2020. Completed 2019 site consolidations at Castel Goffredo, Italy and Lebanon, Tennessee as part of the ongoing strategic optimization of the Engineered Materials global footprint.
• Announced a strategic expansion of the global emulsion polymers production network including low-capital expansion and debottlenecking projects in Nanjing, China and Geleen, Netherlands.
• Delivered over 4,000 Engineered Materials project commercializations in 2019 with fourth quarter wins in targeted applications of medical and pharma, electric vehicles and 5G electronics. Examples include the center console on a highly anticipated electric vehicle currently in development and an antenna application with a leading global smartphone manufacturer.
• Signed a comprehensive strategic cooperation and development agreement with Oriental Yuhong to further promote the sustainable development of waterproofing technologies based on vinyl emulsion technology.
• Announced that the Acetyl Chain's ethylene-based VAM technology received the designation as a “Green Technology” in China for its low carbon emissions, low energy consumption, and low content of heavy components.

Fourth Quarter Business Segment Overview

Engineered Materials

Engineered Materials delivered fourth quarter net sales of $539 million, a 9 percent decline from the prior quarter due to a decline in sequential volume. Volume headwinds in the fourth quarter were more significant than anticipated primarily due to high seasonality in the Western Hemisphere that was not offset by any sequential revenue growth in Asia as in past years. Other unique dynamics further pressured volume in the quarter including reduced demand for products used in capital goods manufacturing and a slower than predicted ramp up following the resolution of the General Motors auto workers' strike. The business delivered fourth quarter GAAP operating profit of $88 million and adjusted EBIT of $136 million at margins of 16.3 percent and 25.2 percent, respectively. Pricing levels were maintained over the third quarter despite challenging demand dynamics as the segment preserved highest value business, resulting in higher margins than the same period last year. Affiliates contributed $45 million in earnings in the fourth quarter, a sequential improvement of $4 million.

Acetyl Chain

The Acetyl Chain recorded fourth quarter net sales of $771 million, driven by an 11 percent sequential decline in volume due primarily to normal winter seasonality and the impact of the Clear Lake incident. Fourth quarter GAAP operating profit of $108 million reflected an impact from the Clear Lake incident approaching $60 million. Adjusted EBIT of $144 million was impacted by the incident by approximately $20 million as the business worked to minimize lost volume and incremental sourcing costs. Repairs and restart of the Clear Lake carbon monoxide (CO) unit were completed in the middle of the fourth quarter and all production units on site are again operating at full rates. As fourth quarter industry pricing for acetic acid continued to deteriorate sequentially despite Clear Lake's limited supply to the industry, the business continued to pivot to VAM and emulsions where it placed 6 percent more tonnage downstream than the same period last year. By activating its global network in response to industry dynamics, the Acetyl Chain continued to deliver consistently elevated earnings performance in the fourth quarter, considering the unique impact of the Clear Lake incident and normal end of year seasonality.

Acetate Tow

Acetate Tow delivered GAAP operating profit of $22 million and adjusted EBIT of $54 million in the fourth quarter. Earnings in the quarter were consistent with the same period last year and down sequentially due to certain timing factors including affiliate dividends. Pricing remained stable year over year. Acetate Tow finalized the shutdown of its production facility at Ocotlán, Mexico in the fourth quarter contributing additional savings to support consistent earnings performance in 2020.

Cash Flow and Tax

Celanese generated 2019 operating cash flow of $1.5 billion and free cash flow of $1.1 billion. Capital expenditures in 2019 were $370 million, approximately $30 million higher than 2018 primarily due to the global acetic acid reconfiguration project. The Company returned a record $1.3 billion of cash to shareholders in 2019, including $1.0 billion in share repurchases and $300 million in cash dividends. Celanese completed $225 million in share repurchases in the fourth quarter with $1.2 billion remaining under the current share repurchase authorization as of year end. The effective US GAAP tax rate was 13 percent for 2019 compared to 19 percent for 2018, primarily resulting from a change in sourcing of US earnings between domestic and foreign sources, and new treasury guidance issued in the fourth quarter and the associated impact to projected foreign tax credit utilization and release of valuation allowances in the year. The tax rate for adjusted earnings per share was 13 percent for 2019, 1 percent lower year over year, due to the same factors impacting foreign tax credits.

Outlook

"As demand levels in the fourth quarter were softer than anticipated, we do not expect any meaningful improvement in the demand landscape across 2020 versus 2019. We are challenging our organization to offset significant incremental turnaround expenses in the year to reach 2020 adjusted earnings of $11 per share driven by factors within our control. Adjusted earnings per share in 2020 should be back half loaded as a result of cumulative returns from productivity and capital deployment as well as $70 to $80 million of turnaround expense in the Acetyl Chain and Engineered Materials occurring almost entirely in the first half. Our teams are hard at work executing on countless projects and initiatives at all levels of the organization that will be critical in delivering this growth target," said Lori Ryerkerk, chief executive officer.

The Company is unable to reconcile forecasted adjusted earnings per share growth to US GAAP diluted earnings per share without unreasonable efforts because a forecast of Certain Items, such as mark-to-market pension gains/losses, is not practical. The Company's prepared remarks related to the fourth quarter and full year results will be posted on its website at investors.celanese.com under Financial Information/Financial Document Library after market close on January 30, 2020. Information about Non-US GAAP measures is included in a Non-US GAAP Financial Measures and Supplemental Information document posted on our website. See "Non-GAAP Financial Measures" below.

Celanese Corporation is a global chemical leader in the production of differentiated chemistry solutions and specialty materials used in most major industries and consumer applications. Our businesses use the full breadth of Celanese's global chemistry, technology and commercial expertise to create value for our customers, employees, shareholders and the corporation. As we partner with our customers to solve their most critical business needs, we strive to make a positive impact on our communities and the world through The Celanese Foundation. Based in Dallas, Celanese employs approximately 7,700 employees worldwide and had 2019 net sales of $6.3 billion. For more information about Celanese Corporation and its product offerings, visit www.celanese.com or our blog at www.celaneseblog.com.

Forward-Looking Statements

This release may contain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, strategies, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the results expressed or implied in the forward-looking statements contained in this release. These risks and uncertainties include, among other things: changes in general economic, business, political and regulatory conditions in the countries or regions in which we operate; the length and depth of product and industry business cycles, particularly in the automotive, electrical, textiles, electronics and construction industries; changes in the price and availability of raw materials, particularly changes in the demand for, supply of, and market prices of ethylene, methanol, natural gas, wood pulp and fuel oil and the prices for electricity and other energy sources; the ability to pass increases in raw material prices on to customers or otherwise improve margins through price increases; the ability to maintain plant utilization rates and to implement planned capacity additions and expansions; the ability to reduce or maintain their current levels of production costs and to improve productivity by implementing technological improvements to existing plants; increased price competition and the introduction of competing products by other companies; market acceptance of our technology; the ability to obtain governmental approvals and to construct facilities on terms and schedules acceptable to the Company; changes in the degree of intellectual property and other legal protection afforded to our products or technologies, or the theft of such intellectual property; compliance and other costs and potential disruption or interruption of production or operations due to accidents, interruptions in sources of raw materials, cyber security incidents, terrorism or political unrest or other unforeseen events or delays in construction or operation of facilities, including as a result of geopolitical conditions, the occurrence of acts of war or terrorist incidents or as a result of weather or natural disasters; potential liability for remedial actions and increased costs under existing or future environmental regulations, including those relating to climate change; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies of governments or other governmental activities in the countries in which we operate; changes in currency exchange rates and interest rates; our level of indebtedness, which could diminish our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy or the chemicals industry; and various other factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made, and the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.

Non-GAAP Financial Measures

Presentation

This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Information

This release uses the following Non-US GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, adjusted earnings per share and free cash flow. These measures are not recognized in accordance with US GAAP and should not be viewed as an alternative to US GAAP measures of performance or liquidity. The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin is operating margin; for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; and for free cash flow is net cash provided by (used in) operations.

Definitions of Non-US GAAP Financial Measures

• Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8 of our Non-US GAAP Financial Measures and Supplemental Information document). We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales.
• Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization.
• Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.
  
  Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a of our Non-US GAAP Financial Measures and Supplemental Information document summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.

• Free cash flow is a liquidity measure used by the Company and is defined by the Company as cash flow from operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway").

Reconciliation of Non-US GAAP Financial Measures

Reconciliations of the Non-US GAAP financial measures used in this press release to the comparable US GAAP financial measure, together with information about the purposes and uses of Non-US GAAP financial measures, are included in our Non-US GAAP Financial Measures and Supplemental Information document filed as an exhibit to our Current Report on Form 8-K filed with the SEC on or about January 30, 2020 and also available on our website at investors.celanese.com under Financial Information/Financial Document Library.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

Supplemental Information

Additional information about our prior period performance is included in our Quarterly Reports on Form 10-Q and in our Non-US GAAP Financial Measures and Supplemental Information document.

Consolidated Statements of Operations - Unaudited
	Three Months Ended
	December 31, 2019			September 30, 2019			December 31, 2018
	(In $ millions, except share and per share data)
Net sales	1,432			1,586			1,689
Cost of sales	(1,116	)		(1,172	)		(1,269	)
Gross profit	316			414			420
Selling, general and administrative expenses	(125	)		(120	)		(134	)
Amortization of intangible assets	(6	)		(6	)		(6	)
Research and development expenses	(17	)		(17	)		(18	)
Other (charges) gains, net	(102	)		(7	)		—
Foreign exchange gain (loss), net	2			(1	)		(2	)
Gain (loss) on disposition of businesses and assets, net	—			(3	)		(1	)
Operating profit (loss)	68			260			259
Equity in net earnings (loss) of affiliates	48			45			53
Non-operating pension and other postretirement employee benefit (expense) income	(71	)		17			(139	)
Interest expense	(28	)		(27	)		(30	)
Refinancing expense	—			—			(1	)
Interest income	2			1			2
Dividend income - equity investments	24			27			25
Other income (expense), net	(2	)		—			5
Earnings (loss) from continuing operations before tax	41			323			174
Income tax (provision) benefit	3			(53	)		(76	)
Earnings (loss) from continuing operations	44			270			98
Earnings (loss) from operation of discontinued operations	1			(6	)		4
Income tax (provision) benefit from discontinued operations	—			1			(1	)
Earnings (loss) from discontinued operations	1			(5	)		3
Net earnings (loss)	45			265			101
Net (earnings) loss attributable to noncontrolling interests	(2	)		(2	)		(2	)
Net earnings (loss) attributable to Celanese Corporation	43			263			99
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	42			268			96
Earnings (loss) from discontinued operations	1			(5	)		3
Net earnings (loss)	43			263			99
Earnings (loss) per common share - basic
Continuing operations	0.35			2.18			0.73
Discontinued operations	0.01			(0.04	)		0.02
Net earnings (loss) - basic	0.36			2.14			0.75
Earnings (loss) per common share - diluted
Continuing operations	0.35			2.17			0.73
Discontinued operations	0.01			(0.04	)		0.02
Net earnings (loss) - diluted	0.36			2.13			0.75
Weighted average shares (in millions)
Basic	120.3			122.7			131.2
Diluted	120.9			123.3			132.1

Consolidated Statements of Operations - Unaudited
	Year Ended December 31,
	2019			2018
	(In $ millions, except share and per share data)
Net sales	6,297			7,155
Cost of sales	(4,691	)		(5,183	)
Gross profit	1,606			1,972
Selling, general and administrative expenses	(483	)		(546	)
Amortization of intangible assets	(24	)		(24	)
Research and development expenses	(67	)		(72	)
Other (charges) gains, net	(203	)		9
Foreign exchange gain (loss), net	7			—
Gain (loss) on disposition of businesses and assets, net	(2	)		(5	)
Operating profit (loss)	834			1,334
Equity in net earnings (loss) of affiliates	182			233
Non-operating pension and other postretirement employee benefit (expense) income	(20	)		(62	)
Interest expense	(115	)		(125	)
Refinancing expense	(4	)		(1	)
Interest income	6			6
Dividend income - equity investments	113			117
Other income (expense), net	(8	)		8
Earnings (loss) from continuing operations before tax	988			1,510
Income tax (provision) benefit	(124	)		(292	)
Earnings (loss) from continuing operations	864			1,218
Earnings (loss) from operation of discontinued operations	(8	)		(5	)
Income tax (provision) benefit from discontinued operations	2			—
Earnings (loss) from discontinued operations	(6	)		(5	)
Net earnings (loss)	858			1,213
Net (earnings) loss attributable to noncontrolling interests	(6	)		(6	)
Net earnings (loss) attributable to Celanese Corporation	852			1,207
Amounts attributable to Celanese Corporation
Earnings (loss) from continuing operations	858			1,212
Earnings (loss) from discontinued operations	(6	)		(5	)
Net earnings (loss)	852			1,207
Earnings (loss) per common share - basic
Continuing operations	6.93			9.03
Discontinued operations	(0.05	)		(0.04	)
Net earnings (loss) - basic	6.88			8.99
Earnings (loss) per common share - diluted
Continuing operations	6.89			8.95
Discontinued operations	(0.05	)		(0.04	)
Net earnings (loss) - diluted	6.84			8.91
Weighted average shares (in millions)
Basic	123.9			134.3
Diluted	124.7			135.4

Consolidated Balance Sheets - Unaudited
	As of December 31,
	2019			2018
	(In $ millions)
ASSETS
Current Assets
Cash and cash equivalents	463			439
Trade receivables - third party and affiliates, net	850			1,017
Non-trade receivables, net	331			301
Inventories	1,038			1,046
Marketable securities	40			31
Other assets	43			40
Total current assets	2,765			2,874
Investments in affiliates	975			979
Property, plant and equipment, net	3,713			3,719
Operating lease right-of-use assets	203			—
Deferred income taxes	96			84
Other assets	338			290
Goodwill	1,074			1,057
Intangible assets, net	312			310
Total assets	9,476			9,313
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings and current installments of long-term debt - third party and affiliates	496			561
Trade payables - third party and affiliates	780			819
Other liabilities	461			343
Income taxes payable	17			56
Total current liabilities	1,754			1,779
Long-term debt, net of unamortized deferred financing costs	3,409			2,970
Deferred income taxes	257			255
Uncertain tax positions	165			158
Benefit obligations	589			564
Operating lease liabilities	181			—
Other liabilities	223			208
Commitments and Contingencies
Stockholders' Equity
Treasury stock, at cost	(3,846	)		(2,849	)
Additional paid-in capital	254			233
Retained earnings	6,399			5,847
Accumulated other comprehensive income (loss), net	(300	)		(247	)
Total Celanese Corporation stockholders' equity	2,507			2,984
Noncontrolling interests	391			395
Total equity	2,898			3,379
Total liabilities and equity	9,476			9,313

Non-US GAAP Financial Measures and Supplemental Information

January 30, 2020

In this document, the terms the "Company," "we" and "our" refer to Celanese Corporation and its subsidiaries on a consolidated basis.

Purpose

The purpose of this document is to provide information of interest to investors, analysts and other parties including supplemental financial information and reconciliations and other information concerning our use of non-US GAAP financial measures. This document is updated quarterly.

Presentation

This document presents the Company's three business segments, Engineered Materials, Acetate Tow and Acetyl Chain.

Use of Non-US GAAP Financial Measures

From time to time, management may publicly disclose certain numerical "non-GAAP financial measures" in the course of our earnings releases, financial presentations, earnings conference calls, investor and analyst meetings and otherwise. For these purposes, the Securities and Exchange Commission ("SEC") defines a "non-GAAP financial measure" as a numerical measure of historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that effectively exclude amounts, included in the most directly comparable measure calculated and presented in accordance with US GAAP, and vice versa for measures that include amounts, or are subject to adjustments that effectively include amounts, that are excluded from the most directly comparable US GAAP measure so calculated and presented. For these purposes, "GAAP" refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures disclosed by management are provided as additional information to investors, analysts and other parties because the Company believes them to be important supplemental measures for assessing our financial and operating results and as a means to evaluate our financial condition and period-to-period comparisons. These non-GAAP financial measures should be viewed as supplemental to, and should not be considered in isolation or as alternatives to, net earnings (loss), operating profit (loss), operating margin, cash flow from operating activities (together with cash flow from investing and financing activities), earnings per share or any other US GAAP financial measure. These non-GAAP financial measures should be considered within the context of our complete audited and unaudited financial results for the given period, which are available on the Financial Information/Financial Document Library page of our website, investors.celanese.com. The definition and method of calculation of the non-GAAP financial measures used herein may be different from other companies' methods for calculating measures with the same or similar titles. Investors, analysts and other parties should understand how another company calculates such non-GAAP financial measures before comparing the other company's non-GAAP financial measures to any of our own. These non-GAAP financial measures may not be indicative of the historical operating results of the Company nor are they intended to be predictive or projections of future results.

Pursuant to the requirements of SEC Regulation G, whenever we refer to a non-GAAP financial measure, we will also present in this document, in the presentation itself or on a Form 8-K in connection with the presentation on the Financial Information/Financial Document Library page of our website, investors.celanese.com, to the extent practicable, the most directly comparable financial measure calculated and presented in accordance with GAAP, along with a reconciliation of the differences between the non-GAAP financial measure we reference and such comparable GAAP financial measure.

This document includes definitions and reconciliations of non-GAAP financial measures used from time to time by the Company.

Specific Measures Used

This document provides information about the following non-GAAP measures: adjusted EBIT, adjusted EBIT margin, operating EBITDA, operating EBITDA margin, operating profit (loss) attributable to Celanese Corporation, adjusted earnings per share, net debt, free cash flow and return on invested capital (adjusted). The most directly comparable financial measure presented in accordance with US GAAP in our consolidated financial statements for adjusted EBIT and operating EBITDA is net earnings (loss) attributable to Celanese Corporation; for adjusted EBIT margin and operating EBITDA margin is operating margin; for operating profit (loss) attributable to Celanese Corporation is operating profit (loss); for adjusted earnings per share is earnings (loss) from continuing operations attributable to Celanese Corporation per common share-diluted; for net debt is total debt; for free cash flow is net cash provided by (used in) operations; and for return on invested capital (adjusted) is net earnings (loss) attributable to Celanese Corporation divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity.

Definitions

• Adjusted EBIT is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense and taxes, and further adjusted for Certain Items (refer to Table 8). We believe that adjusted EBIT provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of unusual, non-operational or restructuring-related activities that affect comparability. Our management recognizes that adjusted EBIT has inherent limitations because of the excluded items. Adjusted EBIT is one of the measures management uses for planning and budgeting, monitoring and evaluating financial and operating results and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted EBIT on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information. Adjusted EBIT margin is defined by the Company as adjusted EBIT divided by net sales. Adjusted EBIT margin has the same uses and limitations as Adjusted EBIT.
• Operating EBITDA is a performance measure used by the Company and is defined by the Company as net earnings (loss) attributable to Celanese Corporation, plus (earnings) loss from discontinued operations, less interest income, plus interest expense, plus refinancing expense, taxes and depreciation and amortization, and further adjusted for Certain Items, which Certain Items include accelerated depreciation and amortization expense. Operating EBITDA is equal to adjusted EBIT plus depreciation and amortization. We believe that Operating EBITDA provides transparent and useful information to investors, analysts and other parties in evaluating our operating performance relative to our peer companies. Operating EBITDA margin is defined by the Company as Operating EBITDA divided by net sales. Operating EBITDA margin has the same uses and limitations as Operating EBITDA.
• Operating profit (loss) attributable to Celanese Corporation is defined by the Company as operating profit (loss), less earnings (loss) attributable to noncontrolling interests ("NCI"). We believe that operating profit (loss) attributable to Celanese Corporation provides transparent and useful information to management, investors, analysts and other parties in evaluating our core operational performance. Operating margin attributable to Celanese Corporation is defined by the Company as operating profit (loss) attributable to Celanese Corporation divided by net sales. Operating margin attributable to Celanese Corporation has the same uses and limitations as Operating profit (loss) attributable to Celanese Corporation.
• Adjusted earnings per share is a performance measure used by the Company and is defined by the Company as earnings (loss) from continuing operations attributable to Celanese Corporation, adjusted for income tax (provision) benefit, Certain Items, and refinancing and related expenses, divided by the number of basic common shares and dilutive restricted stock units and stock options calculated using the treasury method. We believe that adjusted earnings per share provides transparent and useful information to management, investors, analysts and other parties in evaluating and assessing our primary operating results from period-to-period after removing the impact of the above stated items that affect comparability and as a performance metric in the Company's incentive compensation plan. We do not provide reconciliations for adjusted earnings per share on a forward-looking basis (including those contained in this document) when we are unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of Certain Items, such as mark-to-market pension gains and losses, that have not yet occurred, are out of our control and/or cannot be reasonably predicted. For the same reasons, we are unable to address the probable significance of the unavailable information.

Note: The income tax expense (benefit) on Certain Items ("Non-GAAP adjustments") is determined using the applicable rates in the taxing jurisdictions in which the Non-GAAP adjustments occurred and includes both current and deferred income tax expense (benefit). The income tax rate used for adjusted earnings per share approximates the midpoint in a range of forecasted tax rates for the year. This range may include certain partial or full-year forecasted tax opportunities and related costs, where applicable, and specifically excludes changes in uncertain tax positions, discrete recognition of GAAP items on a quarterly basis, other pre-tax items adjusted out of our GAAP earnings for adjusted earnings per share purposes and changes in management's assessments regarding the ability to realize deferred tax assets for GAAP. In determining the adjusted earnings per share tax rate, we reflect the impact of foreign tax credits when utilized, or expected to be utilized, absent discrete events impacting the timing of foreign tax credit utilization. We analyze this rate quarterly and adjust it if there is a material change in the range of forecasted tax rates; an updated forecast would not necessarily result in a change to our tax rate used for adjusted earnings per share. The adjusted tax rate is an estimate and may differ from the actual tax rate used for GAAP reporting in any given reporting period. Table 3a summarizes the reconciliation of our estimated GAAP effective tax rate to the adjusted tax rate. The estimated GAAP rate excludes discrete recognition of GAAP items due to our inability to forecast such items. As part of the year-end reconciliation, we will update the reconciliation of the GAAP effective tax rate to the adjusted tax rate for actual results.

• Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operations, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our methanol joint venture, Fairway Methanol LLC ("Fairway"). We believe that free cash flow provides useful information to management, investors, analysts and other parties in evaluating the Company's liquidity and credit quality assessment because it provides an indication of the long-term cash generating ability of our business. Although we use free cash flow as a measure to assess the liquidity generated by our business, the use of free cash flow has important limitations, including that free cash flow does not reflect the cash requirements necessary to service our indebtedness, lease obligations, unconditional purchase obligations or pension and postretirement funding obligations.

• Net debt is defined by the Company as total debt less cash and cash equivalents. We believe that net debt provides useful information to management, investors, analysts and other parties in evaluating changes to the Company's capital structure and credit quality assessment.

• Return on invested capital (adjusted) is defined by the Company as adjusted EBIT, tax effected using the adjusted tax rate, divided by the sum of the average of beginning and end of the year short- and long-term debt and Celanese Corporation stockholders' equity. We believe that return on invested capital (adjusted) provides useful information to management, investors, analysts and other parties in order to assess our income generation from the point of view of our stockholders and creditors who provide us with capital in the form of equity and debt and whether capital invested in the Company yields competitive returns.

Supplemental Information

Supplemental Information we believe to be of interest to investors, analysts and other parties includes the following:

• Net sales for each of our business segments and the percentage increase or decrease in net sales attributable to price, volume, currency and other factors for each of our business segments.
• Cash dividends received from our equity investments.
• For those consolidated ventures in which the Company owns or is exposed to less than 100% of the economics, the outside stockholders' interests are shown as NCI. Beginning in 2014, this includes Fairway for which the Company's ownership percentage is 50%. Amounts referred to as "attributable to Celanese Corporation" are net of any applicable NCI.

Results Unaudited

The results in this document, together with the adjustments made to present the results on a comparable basis, have not been audited and are based on internal financial data furnished to management. Quarterly results should not be taken as an indication of the results of operations to be reported for any subsequent period or for the full fiscal year.

Table 1

Adjusted EBIT and Operating EBITDA - Reconciliation of Non-GAAP Measures - Unaudited

	2019			Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Net earnings (loss) attributable to Celanese Corporation	852			43			263			209			337			1,207			99			401			344			363
(Earnings) loss from discontinued operations	6			(1	)		5			1			1			5			(3	)		6			—			2
Interest income	(6	)		(2	)		(1	)		(2	)		(1	)		(6	)		(2	)		(2	)		—			(2	)
Interest expense	115			28			27			29			31			125			30			30			32			33
Refinancing expense	4			—			—			4			—			1			1			—			—			—
Income tax provision (benefit)	124			(3	)		53			28			46			292			76			54			97			65
Certain Items attributable to Celanese Corporation (Table 8)	381			238			29			107			7			228			192			5			18			13
Adjusted EBIT	1,476			303			376			376			421			1,852			393			494			491			474
Depreciation and amortization expense(1)	329			84			82			82			81			316			78			77			82			79
Operating EBITDA	1,805			387			458			458			502			2,168			471			571			573			553
	2019			Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
	(In $ millions)
Engineered Materials	4			2			1			—			1			1			—			—			1			—
Acetate Tow	9			2			5			2			—			19			5			11			3			—
Acetyl Chain	10			3			6			—			1			7			5			2			—			—
Other Activities(2)	—			—			—			—			—			—			—			—			—			—
Accelerated depreciation and amortization expense	23			7			12			2			2			27			10			13			4			—
Depreciation and amortization expense(1)	329			84			82			82			81			316			78			77			82			79
Total depreciation and amortization expense	352			91			94			84			83			343			88			90			86			79

______________________________
(1)		Excludes accelerated depreciation and amortization expense as detailed in the table above, which amounts are included in Certain Items above.
(2)		Other Activities includes corporate Selling, general and administrative ("SG&A") expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited

		2019						Q4 '19						Q3 '19						Q2 '19						Q1 '19						2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18
		(In $ millions, except percentages)
Operating Profit (Loss) / Operating Margin
Engineered Materials		446			18.7	%		88			16.3	%		111			18.8	%		103			17.4	%		144			21.7	%		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%
Acetate Tow		52			8.2	%		22			14.9	%		34			21.5	%		(44	)		(26.8	)%		40			24.1	%		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%
Acetyl Chain(1)		678			20.0	%		108			14.0	%		180			20.8	%		188			21.7	%		202			22.7	%		1,024			25.3	%		211			22.5	%		287			28.5	%		273			26.0	%		253			24.1	%
Other Activities(2)		(342	)					(150	)					(65	)					(61	)					(66	)					(280	)					(66	)					(63	)					(68	)					(83	)
Total		834			13.2	%		68			4.7	%		260			16.4	%		186			11.7	%		320			19.0	%		1,334			18.6	%		259			15.3	%		374			21.1	%		358			19.4	%		343			18.5	%
Less: Net Earnings (Loss) Attributable to NCI(1)		6						2						2						1						1						6						2						1						1						2
Operating Profit (Loss) Attributable to Celanese Corporation		828			13.1	%		66			4.6	%		258			16.3	%		185			11.6	%		319			18.9	%		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%
Operating Profit (Loss) / Operating Margin Attributable to Celanese Corporation
Engineered Materials		446			18.7	%		88			16.3	%		111			18.8	%		103			17.4	%		144			21.7	%		460			17.7	%		95			15.3	%		124			19.3	%		114			17.2	%		127			19.1	%
Acetate Tow		52			8.2	%		22			14.9	%		34			21.5	%		(44	)		(26.8	)%		40			24.1	%		130			20.0	%		19			11.8	%		26			16.5	%		39			24.1	%		46			27.4	%
Acetyl Chain(1)		672			19.8	%		106			13.7	%		178			20.5	%		187			21.6	%		201			22.6	%		1,018			25.2	%		209			22.3	%		286			28.4	%		272			25.9	%		251			23.9	%
Other Activities(2)		(342	)					(150	)					(65	)					(61	)					(66	)					(280	)					(66	)					(63	)					(68	)					(83	)
Total		828			13.1	%		66			4.6	%		258			16.3	%		185			11.6	%		319			18.9	%		1,328			18.6	%		257			15.2	%		373			21.1	%		357			19.4	%		341			18.4	%
Equity Earnings and Dividend Income, Other Income (Expense) Attributable to Celanese Corporation
Engineered Materials		168						45						41						36						46						219			(3)			49						62						54						54
Acetate Tow		112						24						27						29						32						116						25						26						33						32
Acetyl Chain		5						1						2						1						1						8						1						2						3						2
Other Activities(2)		2						—						2						1						(1	)					15						8						1						—						6
Total		287						70						72						67						78						358						83						91						90						94
Non-Operating Pension and Other Post-Retirement Employee Benefit (Expense) Income Attributable to Celanese Corporation
Engineered Materials		—						—						—						—						—						—						—						—						—						—
Acetate Tow		—						—						—						—						—						—						—						—						—						—
Acetyl Chain		—						—						—						—						—						—						—						—						—						—
Other Activities(2)		(20	)					(71	)					17						17						17						(62	)					(139	)					25						26						26
Total		(20	)					(71	)					17						17						17						(62	)					(139	)					25						26						26
Certain Items Attributable to Celanese Corporation (Table 8)
Engineered Materials		7						3						2						9						(7	)					15						6						1						7						1
Acetate Tow		104						8						10						86						—						27						9						13						5						—
Acetyl Chain		50						37						11						1						1						(4	)					5						(11	)					2						—
Other Activities(2)		220						190						6						11						13						190						172						2						4						12
Total		381						238						29						107						7						228						192						5						18						13
Adjusted EBIT / Adjusted EBIT Margin
Engineered Materials		621			26.0	%		136			25.2	%		154			26.1	%		148			25.0	%		183			27.6	%		694			26.8	%		150			24.1	%		187			29.1	%		175			26.4	%		182			27.4	%
Acetate Tow		268			42.1	%		54			36.5	%		71			44.9	%		71			43.3	%		72			43.4	%		273			42.1	%		53			32.9	%		65			41.1	%		77			47.5	%		78			46.4	%
Acetyl Chain		727			21.4	%		144			18.7	%		191			22.0	%		189			21.8	%		203			22.8	%		1,022			25.3	%		215			23.0	%		277			27.5	%		277			26.4	%		253			24.1	%
Other Activities(2)		(140	)					(31	)					(40	)					(32	)					(37	)					(137	)					(25	)					(35	)					(38	)					(39	)
Total		1,476			23.4	%		303			21.2	%		376			23.7	%		376			23.6	%		421			25.0	%		1,852			25.9	%		393			23.3	%		494			27.9	%		491			26.6	%		474			25.6	%

___________________________

(1)		Net earnings (loss) attributable to NCI is included within the Acetyl Chain segment.
(2)		Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).
(3)		Includes $218 million of Equity in net earnings (loss) of affiliates and $1 million of Other income.

Table 2 - Supplemental Segment Data and Reconciliation of Segment Adjusted EBIT and Operating EBITDA - Non-GAAP Measures - Unaudited (cont.)

		2019						Q4 '19						Q3 '19						Q2 '19						Q1 '19						2018						Q4 '18						Q3 '18						Q2 '18						Q1 '18
		(In $ millions, except percentages)
Depreciation and Amortization Expense(1)
Engineered Materials		127						33						32						31						31						125						30						31						32						32
Acetate Tow		36						8						9						9						10						39						9						10						10						10
Acetyl Chain		151						39						37						38						37						141						36						34						36						35
Other Activities(2)		15						4						4						4						3						11						3						2						4						2
Total		329						84						82						82						81						316						78						77						82						79
Operating EBITDA / Operating EBITDA Margin
Engineered Materials		748			31.3	%		169			31.4	%		186			31.5	%		179			30.2	%		214			32.3	%		819			31.6	%		180			28.9	%		218			34.0	%		207			31.2	%		214			32.2	%
Acetate Tow		304			47.8	%		62			41.9	%		80			50.6	%		80			48.8	%		82			49.4	%		312			48.1	%		62			38.5	%		75			47.5	%		87			53.7	%		88			52.4	%
Acetyl Chain		878			25.9	%		183			23.7	%		228			26.3	%		227			26.2	%		240			27.0	%		1,163			28.8	%		251			26.8	%		311			30.9	%		313			29.8	%		288			27.4	%
Other Activities(2)		(125	)					(27	)					(36	)					(28	)					(34	)					(126	)					(22	)					(33	)					(34	)					(37	)
Total		1,805			28.7	%		387			27.0	%		458			28.9	%		458			28.8	%		502			29.8	%		2,168			30.3	%		471			27.9	%		571			32.2	%		573			31.1	%		553			29.9	%

___________________________
(1)		Excludes accelerated depreciation and amortization expense, which amounts are included in Certain Items above. See Table 1 for details.
(2)		Other Activities includes corporate SG&A expenses, the results of captive insurance companies and certain components of net periodic benefit cost (interest cost, expected return on plan assets and net actuarial gains and losses).

Table 3

Adjusted Earnings (Loss) per Share - Reconciliation of a Non-GAAP Measure - Unaudited

		2019					Q4 '19					Q3 '19					Q2 '19					Q1 '19					2018					Q4 '18					Q3 '18					Q2 '18					Q1 '18
					per share					per share					per share					per share					per share					per share					per share					per share					per share					per share
		(In $ millions, except per share data)
Earnings (loss) from continuing operations attributable to Celanese Corporation		858			6.89		42			0.35		268			2.17		210			1.67		338			2.64		1,212			8.95		96			0.73		407			3.00		344			2.52		365			2.68
Income tax provision (benefit)		124					(3	)				53					28					46					292					76					54					97					65
Earnings (loss) from continuing operations before tax		982					39					321					238					384					1,504					172					461					441					430
Certain Items attributable to Celanese Corporation (Table 8)		381					238					29					107					7					228					192					5					18					13
Refinancing and related expenses		4					—					—					4					—					1					1					—					—					—
Adjusted earnings (loss) from continuing operations before tax		1,367					277					350					349					391					1,733					365					466					459					443
Income tax (provision) benefit on adjusted earnings(1)		(178	)				(36	)				(38	)				(49	)				(55	)				(243	)				(51	)				(65	)				(64	)				(62	)
Adjusted earnings (loss) from continuing operations(2)		1,189			9.53		241			1.99		312			2.53		300			2.38		336			2.62		1,490			11.00		314			2.38		401			2.96		395			2.90		381			2.79
		Diluted shares (in millions)(3)
Weighted average shares outstanding		123.9					120.3					122.7					125.3					127.5					134.3					131.2					134.5					135.6					135.9
Incremental shares attributable to equity awards		0.8					0.6					0.6					0.5					0.7					1.1					0.9					1					0.7					0.5
Total diluted shares		124.7					120.9					123.3					125.8					128.2					135.4					132.1					135.5					136.3					136.4

______________________________
(1)		Calculated using adjusted effective tax rates (Table 3a) as follows:

		2019					Q4 '19					Q3 '19					Q2 '19					Q1 '19					2018					Q4 '18					Q3 '18					Q2 '18					Q1 '18
		(In percentages)
Adjusted effective tax rate		13					13					11					14					14					14					14					14					14					14

(2)

Excludes the immediate recognition of actuarial gains and losses and the impact of actual vs. expected plan asset returns.

		Actual Plan Asset Returns			Expected Plan Asset Returns
		(In percentages)
Q4 '19 & 2019		16.7			6.5
Q4 '18 & 2018		(3.9	)		6.7

(3)

Potentially dilutive shares are included in the adjusted earnings per share calculation when adjusted earnings are positive.

Table 3a

Adjusted Tax Rate - Reconciliation of a Non-GAAP Measure - Unaudited

		Actual
		2019			2018
		(In percentages)
US GAAP annual effective tax rate		13			19
Utilization of foreign tax credits		(3	)		—
Changes in valuation allowances, excluding impact of other charges and adjustments(1)		3			(5	)
Adjusted tax rate		13			14

______________________________
Note: As part of the year-end reconciliation, we updated the reconciliation of the GAAP effective tax rate for actual results.
(1)		Reflects changes in valuation allowances related to changes in judgment regarding the realizability of deferred tax assets or current year operations, excluding other charges and adjustments.

Table 4

Net Sales by Segment - Unaudited

		2019			Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
		(In $ millions)
Engineered Materials		2,386			539			591			593			663			2,593			622			642			664			665
Acetate Tow		636			148			158			164			166			649			161			158			162			168
Acetyl Chain		3,392			771			867			865			889			4,042			936			1,006			1,049			1,051
Intersegment eliminations(1)		(117	)		(26	)		(30	)		(30	)		(31	)		(129	)		(30	)		(35	)		(31	)		(33	)
Net sales		6,297			1,432			1,586			1,592			1,687			7,155			1,689			1,771			1,844			1,851

___________________________
(1)		Includes intersegment sales primarily related to the Acetyl Chain.

Table 4a

Factors Affecting Segment Net Sales Sequentially - Unaudited

Three Months Ended December 31, 2019 Compared to Three Months Ended September 30, 2019

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(9	)		—			—			—			(9	)
Acetate Tow	(6	)		—			—			—			(6	)
Acetyl Chain	(11	)		—			—			—			(11	)
Total Company	(10	)		—			—			—			(10	)

Three Months Ended September 30, 2019 Compared to Three Months Ended June 30, 2019

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	2			(2	)		(1	)		—			(1	)
Acetate Tow	(2	)		(1	)		—			—			(3	)
Acetyl Chain	1			—			(1	)		—			—
Total Company	2			(1	)		(1	)		—			—

Three Months Ended June 30, 2019 Compared to Three Months Ended March 31, 2019

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(7	)		(3	)		(1	)		—			(11	)
Acetate Tow	(1	)		—			—			—			(1	)
Acetyl Chain	2			(4	)		(1	)		—			(3	)
Total Company	(2	)		(3	)		(1	)		—			(6	)

Three Months Ended March 31, 2019 Compared to Three Months Ended December 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	5			2			—			—			7		(1)
Acetate Tow	1			2			—			—			3
Acetyl Chain	5			(10	)		—			—			(5	)
Total Company	5			(5	)		—			—			—

Three Months Ended December 31, 2018 Compared to Three Months Ended September 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(4	)		2			(1	)		—			(3	)
Acetate Tow	2			(1	)		—			—			1
Acetyl Chain	(3	)		(4	)		(1	)		1			(7	)
Total Company	(3	)		(2	)		(1	)		1			(5	)

Three Months Ended September 30, 2018 Compared to Three Months Ended June 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(2	)		—			(1	)		—			(3	)
Acetate Tow	(2	)		—			—			—			(2	)
Acetyl Chain	(4	)		2			(2	)		—			(4	)
Total Company	(3	)		1			(2	)		—			(4	)

Three Months Ended June 30, 2018 Compared to Three Months Ended March 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(1	)		3			(2	)		—			—
Acetate Tow	(3	)		—			(1	)		—			(4	)
Acetyl Chain	(2	)		4			(1	)		(1	)		—
Total Company	(2	)		3			(1	)		—			—

Three Months Ended March 31, 2018 Compared to Three Months Ended December 31, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	10			3			2			—			15		(2)
Acetate Tow	8			—			—			—			8
Acetyl Chain	8			9			3			(2	)		18
Total Company	9			6			2			(1	)		16

_________________________
(1)		2019 includes the effect of the acquisition of Next Polymers Ltd.
(2)		2018 includes the effect of the acquisition of Omni Plastics, L.L.C.

Table 4b

Factors Affecting Segment Net Sales Year Over Year - Unaudited

Three Months Ended December 31, 2019 Compared to Three Months Ended December 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(9	)		(3	)		(1	)		—			(13	)
Acetate Tow	(8	)		—			—			—			(8	)
Acetyl Chain	(4	)		(13	)		(1	)		—			(18	)
Total Company	(6	)		(8	)		(1	)		—			(15	)

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(4	)		(2	)		(2	)		—			(8	)
Acetate Tow	—			—			—			—			—
Acetyl Chain	6			(18	)		(2	)		—			(14	)
Total Company	2			(11	)		(2	)		1			(10	)

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(8	)		—			(3	)		—			(11	)
Acetate Tow	1			1			(1	)		—			1
Acetyl Chain	(1	)		(14	)		(3	)		—			(18	)
Total Company	(3	)		(8	)		(3	)		—			(14	)

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(3	)		7			(4	)		—			—
Acetate Tow	(1	)		—			—			—			(1	)
Acetyl Chain	(4	)		(8	)		(3	)		—			(15	)
Total Company	(3	)		(2	)		(4	)		—			(9	)

Three Months Ended December 31, 2018 Compared to Three Months Ended December 31, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	2			7			(2	)		—			7
Acetate Tow	5			(2	)		—			—			3
Acetyl Chain	(2	)		10			(2	)		(1	)		5
Total Company	—			8			(2	)		—			6

Three Months Ended September 30, 2018 Compared to Three Months Ended September 30, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	7			6			(1	)		—			12
Acetate Tow	5			(3	)		—			(1	)		1
Acetyl Chain	(3	)		22			—			(2	)		17
Total Company	1			14			(1	)		(1	)		13

Three Months Ended June 30, 2018 Compared to Three Months Ended June 30, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	11			7			4			—			22
Acetate Tow	1			(2	)		—			—			(1	)
Acetyl Chain	6			19			5			(3	)		27
Total Company	7			13			4			(2	)		22

Three Months Ended March 31, 2018 Compared to Three Months Ended March 31, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	19			3			7			—			29
Acetate Tow	(9	)		(4	)		1			—			(12	)
Acetyl Chain	3			25			7			(3	)		32
Total Company	7			14			6			(1	)		26

Table 4c

Factors Affecting Segment Net Sales Year Over Year - Unaudited

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	(5	)		—			(3	)		—			(8	)
Acetate Tow	(2	)		—			—			—			(2	)
Acetyl Chain	(1	)		(13	)		(2	)		—			(16	)
Total Company	(3	)		(7	)		(2	)		—			(12	)

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

	Volume			Price			Currency			Other			Total
	(In percentages)
Engineered Materials	9			6			2			—			17
Acetate Tow	—			(3	)		—			—			(3	)
Acetyl Chain	1			19			2			(2	)		20
Total Company	4			12			2			(1	)		17

Table 5

Free Cash Flow - Reconciliation of a Non-GAAP Measure - Unaudited

		2019			Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
		(In $ millions, except percentages)
Net cash provided by (used in) investing activities		(493	)		(168	)		(82	)		(66	)		(177	)		(507	)		(98	)		(78	)		(96	)		(235	)
Net cash provided by (used in) financing activities		(935	)		(199	)		(299	)		(307	)		(130	)		(1,165	)		(526	)		(383	)		(254	)		(2	)
Net cash provided by (used in) operating activities		1,454			326			397			424			307			1,558			363			467			585			143
Capital expenditures on property, plant and equipment		(370	)		(144	)		(82	)		(65	)		(79	)		(337	)		(93	)		(79	)		(79	)		(86	)
Capital (distributions to) contributions from NCI		(10	)		(3	)		—			(3	)		(4	)		(23	)		(9	)		(6	)		(6	)		(2	)
Free cash flow(1)(2)		1,074			179			315			356			224			1,198			261			382			500			55
Net sales		6,297			1,432			1,586			1,592			1,687			7,155			1,689			1,771			1,844			1,851
Free cash flow as % of Net sales		17.1	%		12.5	%		19.9	%		22.4	%		13.3	%		16.7	%		15.5	%		21.6	%		27.1	%		3.0	%

______________________________
(1)	Free cash flow is a liquidity measure used by the Company and is defined by the Company as net cash provided by (used in) operating activities, less capital expenditures on property, plant and equipment, and adjusted for capital contributions from or distributions to Mitsui & Co., Ltd. ("Mitsui") related to our joint venture, Fairway Methanol LLC ("Fairway").
(2)	Excludes required debt service and finance lease payments of $24 million and $63 million for the years ended December 31, 2019 and 2018, respectively.

Table 6

Cash Dividends Received - Unaudited

		2019		Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018		Q4 '18			Q3 '18			Q2 '18			Q1 '18
		(In $ millions)
Dividends from equity method investments		168		42			15			41			70			221		62			44			39			76
Dividends from equity investments without readily determinable fair values		113		24			27			30			32			117		25			26			34			32
Total		281		66			42			71			102			338		87			70			73			108

Table 7

Net Debt - Reconciliation of a Non-GAAP Measure - Unaudited

		2019			Q4 '19			Q3 '19			Q2 '19			Q1 '19			2018			Q4 '18			Q3 '18			Q2 '18			Q1 '18
		(In $ millions)
Short-term borrowings and current installments of long-term debt - third party and affiliates		496			496			368			319			743			561			561			229			366			425
Long-term debt, net of unamortized deferred financing costs		3,409			3,409			3,359			3,444			2,933			2,970			2,970			3,196			3,228			3,343
Total debt		3,905			3,905			3,727			3,763			3,676			3,531			3,531			3,425			3,594			3,768
Cash and cash equivalents		(463	)		(463	)		(497	)		(491	)		(441	)		(439	)		(439	)		(703	)		(708	)		(490	)
Net debt		3,442			3,442			3,230			3,272			3,235			3,092			3,092			2,722			2,886			3,278

Table 8

Certain Items - Unaudited

The following Certain Items attributable to Celanese Corporation are included in Net earnings (loss) and are adjustments to non-GAAP measures:

	2019		Q4 '19		Q3 '19		Q2 '19		Q1 '19		2018		Q4 '18		Q3 '18		Q2 '18		Q1 '18		Income Statement Classification
	(In $ millions)
Plant/office closures	26		12		9		2		3		19		16		—		3		—		Cost of sales / SG&A / Other (charges) gains, net / Gain (loss) on disposition of businesses and assets, net
Asset impairments(1)	94		2		9		83		—		—		—		—		—		—		Cost of sales / Other (charges) gains, net
Clear Lake incident	34		32		2		—		—		—		—		—		—		—		Cost of sales
Mergers and acquisitions	12		3		2		4		3		33		6		3		11		13		Cost of sales / SG&A
Actuarial (gain) loss on pension and postretirement plans	88		88		—		—		—		166		166		—		—		—		Cost of sales / SG&A / Non-operating pension and other postretirement employee benefit (expense) income
Restructuring	27		6		7		15		(1)		9		4		2		3		—		SG&A / Other (charges) gains, net / Non-operating pension and other postretirement employee benefit (expense) income
European Commission investigation	89		89		—		—		—		—		—		—		—		—		Other (charges) gains, net
Commercial disputes	10		6		—		2		2		—		—		—		—		—		Cost of sales / SG&A / Other (charges) gains, net
Other	1		—		—		1		—		1		—		—		1		—		SG&A / Gain (loss) on disposition of businesses and assets, net
Certain Items attributable to Celanese Corporation	381		238		29		107		7		228		192		5		18		13

______________________________
(1)	Includes $5 million of asset impairments in 2019 related to the Clear Lake incident.

Table 9

Return on Invested Capital (Adjusted) - Presentation of a Non-GAAP Measure - Unaudited

						2019							2018
						(In $ millions, except percentages)							(In $ millions, except percentages)
Net earnings (loss) attributable to Celanese Corporation						852							1,207
Adjusted EBIT (Table 1)						1,476							1,852
Adjusted effective tax rate (Table 3a)						13	%						14	%
Adjusted EBIT tax effected						1,284							1,593
		2019		2018		Average			2018		2017		Average
		(In $ millions, except percentages)
Short-term borrowings and current installments of long-term debt - third parties and affiliates		496		561		529			561		326		444
Long-term debt, net of unamortized deferred financing costs		3,409		2,970		3,190			2,970		3,315		3,143
Celanese Corporation stockholders' equity		2,507		2,984		2,746			2,984		2,887		2,936
Invested capital						6,465							6,523
Return on invested capital (adjusted)						19.9	%						24.4	%
Net earnings (loss) attributable to Celanese Corporation as a percentage of invested capital						13.2	%						18.5	%

 

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